The Average 401(k) Balance Is Now $113K: Here’s How To Catch Up If You’re Behind
Written by
Gabrielle Olya
Edited by
Molly Sullivan
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Americans, as a whole, have been boosting their 401(k) balances. New Bank of America data found that the average 401(k) account balance increased by 13% in 2025, reaching more than $113,000 by year-end. The data also showed that the average contribution rate remained steady at 7.2%.
At first glance, those numbers sound encouraging. But a closer look shows that while many workers are saving consistently, plenty are still falling short of what they may ultimately need for retirement.
Here’s what’s driving the increase in 401(k) balances — and what to do if your own balance is below average.
Why Average 401(k) Balances Are Rising in the US
Despite a challenging year for many, American workers still made an effort to save for the long term.
“The data shows that employees remained particularly focused on saving for retirement in 2025 — especially boomers, who had the largest portion of participants with contribution rates of 7% or higher,” said Lorna Sabbia, head of workplace benefits at Bank of America.
Staying consistent with contributions helped Americans boost savings despite market swings.
“While market forces always play a role, the stability and consistent savings habits observed throughout the year were clearly a positive factor contributing to the overall increase in account balances,” Sabbia said.
That commitment aligns with employee sentiment. Nearly 7 in 10 employees said saving for retirement was one of their top goals for 2025, according to Bank of America’s 2025 Workplace Benefits Report.
“This data shows employees stayed committed to that goal,” Sabbia said.
Still, higher average balances don’t necessarily mean everyone is on track.
Is the Average 401(k) Contribution Rate Enough for Retirement?
While the average 401(k) contribution rate for 2025 was 7.2%, the actual amount Americans are contributing varies.
“Individual contribution rates vary greatly depending on a range of personal circumstances, from your salary or regular expenses to your unique savings goals in retirement,” Sabbia said.
For many workers, however, contributing just over 7% may not be enough to support a comfortable retirement — especially when factoring in longer life expectancies and rising costs.
“An ideal target rate is at least 10% of your monthly income,” Sabbia said. “But even contributing a small amount, or slowly increasing your contribution as you earn more, will be beneficial in the long term.”
The important part is to start early and let compound interest — and time — do some of the work for you.
How To Increase Your 401(k) Savings If You’re Behind
Retirement goals look different for everyone, but there are several proven strategies that can help boost your 401(k) balance over time. If your balance is below average, Sabbia recommended these strategies to help close the gap over time.
Max Out Your Employer Match
Employees participating in a 401(k) plan should contribute enough to maximize the match from their employer, if offered. “This avoids leaving any money on the table,” Sabbia said.
Use Employer-Provided Tools and Guidance
Many plans offer digital tools, calculators or access to financial guidance that can help you track progress, model retirement scenarios and adjust savings rates as your circumstances change.
Take Advantage of Auto-Enroll and Auto-Increase Features
Plans that include automatic enrollment and automatic contribution increases tend to produce stronger results. Bank of America data shows that employees who used these features had average balances more than $50,000 higher than the overall average.
“If you’re just starting out or recommitting to your retirement savings, opting into these features — if available — is an easy way to help grow your balance over time,” Sabbia said.
While a $113,000 average 401(k) balance signals progress, it’s not a finish line. Regular contributions, utilizing smart plan features and making incremental increases can have a meaningful difference, no matter where you’re starting from.
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